Weekly Software Review: Salesforce, Symantec, Oracle

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It was a quiet week for the software industry on the markets following the Memorial Day Weekend. During the week ended May 28th, shares of software giants Salesforce.com (NYSE: CRM) and Oracle Corp. (NYSE: ORCL) remained nearly flat, while shares of security software major Symantec Corp. (NYSE: SYMC) gained 2% Monday through Thursday. Comparatively, the DOW Jones U.S. Software Index as well as the broader S&P 500 remained flat over the week.

In this report, we take a look at some of the key updates pertaining to the aforementioned companies during the week ended May 28th.

Salesforce.com

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Salesforce retained the top spot in the global Customer Relationship Management (CRM) market in 2014, according to a new Gartner report. [1] Gartner pegs the global CRM market to have grown by 13.3% in 2014 to reach $23.2 billion. The top five vendors accounted for over half of the total market in 2014, although their collective market share declined by 70 basis points compared to 2013.

Source: Gartner

Salesforce leads the market with 18.4% market, widening the gap with the second ranked SAP SE (NYSE: SAP). Each of the remaining four of the top five CRM vendors (namely, SAP, Oracle, Microsoft and IBM) achieved marginal expansion in their market shares. From the above, it is clear that none of these four vendors are even close to approaching Salesforce’s level in the CRM software market. This reaffirms Salesforce’s position and reputation as the undisputed leader in CRM software.

We have a price estimate of $65 for Salesforce.com, which is about 10% lower than its current market price.

See our complete analysis for Salesforce.com here

Symantec Corp.

As per a new Gartner report, Symantec held on to its position as the largest security software vendor in the world in 2014, despite a decline in its revenues. [2] Symantec accounted for a 17% market share of the $21.4 billion security software market in 2014, even though the company’s revenues contracted by 1.3% during the year. On the other hand, the global security software market expanded by 5.3% in 2014, led by strong growth -in Security Information and Event Management, Secure Web Gateway and Data Loss Prevention (DLP) segments, among others. In fact, the strong growth in the DLP market was primarily due to Symantec’s strong performance in the segment, which accounts for nearly half of the $0.6 billion DLP market. However, Endpoint Protection Platforms, a major component of Symantec’s security software portfolio, witnessed a weak growth in 2014.

Other major players in the global security software market achieved notable revenue growth in 2014, thus expanding the market share during the year. Intel (NASDAQ: INTC), which owns the McAfee brand, accounted for 8% of the global security software market in 2014. IBM (NYSE: IBM) stood third with a 7% market share.

We have a price estimate of $26 for Symantec Corp., which is about 5% higher than its current market price.

See our complete analysis for Symantec Corp. here

Oracle Corp.

During the week, Oracle won a minor victory in its $1 billion copyright battle against Google (NYSE: GOOG). Responding to a request by the Supreme Court, the U.S. Solicitor General has recommended that the Supreme Court should not intervene in the case. [3] The Solicitor General stated that one of Google’s key arguments in the case lacks merit and the Supreme Court should “decline to consider the case, particularly because it hasn’t been fully resolved in the lower courts”.

Oracle had sued Google for $1 billion in 2010, alleging that the latter’s Android operating system infringed its copyrights on the Java platform. Last October, Google approached the Supreme Court to review the case when a federal court ruled that the Java programs, owned by Oracle, were entitled to copyright protection. The situation is complicated by the fact the claimed infringement occurred while Java was an offering of Sun Microsystems, which for a time treated Java as an Open Source product available to other companies for further development.

We have a price estimate of $47 for Oracle Corp., which is about 5% higher than its current market price.

See our complete analysis for Oracle Corp. here

Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap

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Notes:
  1. Gartner Says Customer Relationship Management Software Market Grew 13.3 Percent, Gartner, May 19, 2015 []
  2. Symantec still top security supplier by revenue, says Gartner, Computer Weekly, May 27, 2015 []
  3. Google Faces New Hurdle in Oracle Copyright Fight, The Wall Street Journal, May 27, 2015 []